Leather Goods – Insights
The products made from animal hide by means of tanning, a process that stabilizes proteins, are referred as leather goods. The process of tanning animal hide makes it suitable for various applications such as wallets, clothing, footwear, and others. The inherent qualities of leather such as dustproof, fireproof, crack proof, and durability is expected to increase growth of leather goods market. Furthermore, increasing demand for trendy hand bags, premium wallets, and other leather products is propelling growth of leather goods market. However, low availability of raw material, availability of synthetic alternatives such as plastic leather, and availability of leather goods at low cost are some of the factors restraining growth of leather goods market.
On the basis of product type, leather goods are segmented into footwear, accessories, luggage, and others. Among product type, footwear segment is projected to witness highest revenue share in market over the forecast period. This is attributed to increasing inclination of consumer towards comfortable and high quality products. For instance, according to the India Brand Equity Foundation (IBEF), per capita footwear consumption is expected to increase up to four pairs by 2020, whereas domestic footwear consumption is expected to reach five billion pairs. Furthermore, luggage segment is projected to witness significant growth in global leather goods market over the forecast period, owing to increasing retail sales. According to the Travel Goods Association, retail sales of luggage in 2015, was 59.74 million units, which increased to 76.023 million units in 2016 in the U.S.
Asia Pacific is predicted to record substantial growth in the global leather goods market during the forecast period (2019 to 2027). Increasing demand for leather goods by the fashion industry especially footwear is driving growth of the market. Furthermore, growth of the leather industry in the region is further fuelling the demand for leather products in the region. According to India Brand Equity Foundation (IBEF), India ranks second in terms of leather goods and footwear production in 2017 and accounted for 12.93% of leather production of hides or skins worldwide.
Europe region is projected to witness significant growth in leather goods market in terms of revenue over the forecast period. The tanneries in Europe is highly competitive sector in the global leather market and the tanning industry in Europe is one of the largest supplier of the leather in 2015, according to European Union. Also, Europe accounted for one third of the world’s leather goods market, as it is one of the largest traded region in world, Italy accounted for 18% of global leather exports in 2016, according to CBI Ministry of Foreign Affairs. Furthermore, fashion industry is one of the most creative and vibrant sector in Europe. Various players in leather goods market increased their sales revenue in fashion and leather goods industry, driving the market growth. For example, LVMH, one of the key player based in Paris, engaged in fashion and leather goods business group witness sales of US$ 15.93 bn in 2016 and increased up to US$ 19.291 bn in 2017.
However, shortage of leather goods worldwide is resulting in increasing its cost. As a result, European buyers are looking for low cost supplier and manufacturing leather made of exotic animals such as pythons and alligators. For instance, the fashion industry in Europe accounted for 96% of the python skin market, Italy, Spain and France being the major importers in 2016, as stated in Humane Society International.
The leather goods market was valued at US$ 220.71 billion in 2016 and is expected to expand at a CAGR of 5.02%, in terms of revenue, over the forecast period (2017 – 2025).
Global Leather Goods Market Share, by Region, 2016
North America accounted for largest market share of over 25.0% in the global leather goods market in 2018. This is attributed to the availability of raw skin and hides from the slaughterhouses and the discovery of chrome tanning process. According to U.S. Hide, Skin and Leather Association, hides and skins companies in U.S. regularly import nearly 90% of total production of these products, which in turn is boosting growth of leather and leather goods industry.
Several manufacturers are adopting various organic strategies such as technological innovations and new product launch to maintain their market position. For instance, in July 2017, Rugged Material, launched The Ultimate Leather EDC Belt, designed with a hidden pocket and with high durability.
Major Players in Global Leather Goods Market:
Some of the key players operating in the global leather goods market include LVMH Moët Hennessy Louis Vuitton SE, Kering S.A., Adidas AG, Hermès International S.A., Dolce & Gabbana Luxembourg S.à.r.l., Overseas Leather Goods Company Pvt Ltd, Tata International Ltd, Chanel International B.V., Prada S.p.A, Ralph Lauren Corporation, and others.
Leather is made from hides and skin of the animals such as cattle, sheep, dogs, pigs, and others by the process of tanning or by impregnation preserving the natural structure of the hide. Increasing supply of the raw material depends on the increasing demand for meat, is driving growth of leather goods market. According to United States, Food and Agriculture Organization, the meat consumption in 2015 was 41.3 kg per capita in world, which is expected to increase up to 45.3 kg per capita by 2030. Furthermore, the leather is one of the most traded commodities in the world and plays an important role in the growing economy of the world. According to Council for Leather Exports (CLE), U.S. holds first position in import of leather products and accounted for 14.25% in 2016, which increases up to 15.36% in 2017.
Asia Pacific is projected to hold the dominant position in global leather goods market, followed by North America and Europe over the forecast period. There are various institutional support offered to the leather industry, which is expected to fuel the growth of leather goods market. For instance, Leather Industry Association of Botswana, represents hide and skin and manufacturers of leather products collaborated with the government in order to review legislation, policy strategies and guidelines to improve the quality, and leather products manufacturing plants.
However, as the production of leather involves killing of animals such as cattle and calves, the petitions are being filed by various organizations such as People for the Ethical Treatment of Animals (PETA) to ban leather products, which is expected to have negative impact on the growth of market. Moreover, introduction of cheaper raw materials as compared to leather is also hindering the market growth.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.